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Schumer 'very hopeful' a cut in highway aid can be averted

Sen. Chuck Schumer said he's very hopeful lawmakers can reach an agreement this month to come up with the $8.1 billion needed to keep the federal Highway Trust Fund solvent through the end of the year.

Schumer 'very hopeful' a cut in highway aid can be averted

WASHINGTON – Sen. Charles Schumer said Monday he's very hopeful Senate and House lawmakers can reach a bipartisan agreement this month to come up with the $8.1 billion needed to keep the federal Highway Trust Fund solvent through the end of the year.

"Obviously there's got to be a compromise, but I am very hopeful that we can get that compromise," Schumer, D-New York, said in a conference call with reporters. "Signs are looking good that we can come to that compromise.''

Schumer, who is No. 3 in the Senate's Democratic leadership, declined to discuss what mix of revenue and spending cuts might be under consideration. "I think we are looking at everything,'' he said, referring to negotiations between Senate Finance Committee Chairman Ron Wyden, D-Oregon, and his House Republican counterpart, Ways and Means Committee Chairman Dave Camp of Michigan.

States face an average 28 percent reduction in federal highway and transit aid beginning next month, Transportation Secretary Anthony Foxx estimated on his official blog Monday.

Timothy Hens, president of the New York State County Highway Superintendents Association, expects there will be "significant disruptions in federally funded construction projects'' if Congress does not resolve the shortfall.

"There is a significant potential for projects to be halted and work planned to be delayed,'' Hens said in an email Monday. "The disruption of these projects would occur during the middle of the construction season, which would have dire consequences for northern tier states that already have a limited construction season due to weather.''

The federal transportation secretary announced last week his department will begin using "a new process of cash management'' that will reimburse states on a percentage of their annual allotment every two weeks instead of making daily reimbursements.

"We believe this is the most equitable and most prudent approach,'' Foxx said.

The Obama administration estimates the Highway Trust Fund — which has separate highway and transit accounts — faces a $63 billion shortfall over the next four years. Created in 1956, the trust fund derives 90 percent of its revenue from an 18.4 cent-per-gallon federal tax on gasoline and a 24.4 cent-per-gallon federal tax on diesel fuel. The remaining revenue comes from other fees, including truck registration fees and a truck tire tax.

Revenues have not kept up with the construction needs, however, in large part because motorists are driving more fuel-efficient vehicles.

The U.S. Chamber of Commerce and the AFL-CIO have endorsed an increase in federal fuel taxes to keep the highway trust fund solvent, former Pennsylvania Gov. Edward G. Rendell, co-chairman of the advocacy group Building America's Future said Monday. "We think that's a step that has to be taken certainly to fund a six-year bill,'' Rendell said.

The nonpartisan Congressional Budget Office recently estimated that a 6 cents-a-gallon increase in federal gasoline and diesel fuel taxes for the final five months of the year would generate only about $4 billion in added revenue — or about half of what's needed.

Many congressional Republicans, however, oppose any tax increase.

Rep. Chris Collins, R-Clarence, described a short-term fix as "imperative.''

"While I do not support raising taxes at the gas pump for hardworking taxpayers, I am interested in looking at creative ways to secure the trust fund on a long-term basis – including using foreign-earned dollars to fund the Highway Trust Fund,'' Rep. Tom Reed, R-Corning, said in a statement Monday.

Similarly, Democratic Rep. Sean Patrick Maloney of Cold Spring is a co-sponsor of legislation that would allow multinational corporations with overseas profits to bring that money back to the U.S. by either buying bonds to finance transportation projects or at a lower tax rate with the revenue replenishing the highway trust fund.

"It will allow massive new investments in America for a generation,'' Maloney said in an interview.

Democratic Rep. Louise Slaughter of Fairport supports legislation that would make it more difficult for U.S. corporations to move their legal headquarters overseas under a process called inversion that lowers their taxes. "This bill is a win-win-win,'' she said in a statement. "Stopping corporate tax cheats, using the money to fix our crumbling infrastructure, and creating jobs in the process.''